Production for the year is still expected to be above last year despite 2018’s weather challenges, albeit by less than previously forecast. Additionally, strong production in New Zealand is adding downwards pressure to global markets. EU fat prices had been running at a premium to world prices, but this is starting to erode as alternative supplies increase.

Butter prices fell in October, reducing its premium over other regions. Lower prices have helped renew purchasing interest, and contracting for the rest of the year is now reported to be mostly sorted.

There is interest for Q1 2019, but a disparity in price expectations from buyers and sellers is said to be slowing that trade. Uncertainty over the amount of butter in private stocks is also a consideration for those trading.

Demand has been slow for powders, as most buyers are already covered for the remainder of the year. WMP faces additional downwards pressure from reduced export demand, as export customers are drawn towards cheaper prices in Oceania.

Cheese prices were steady on the month overall. Cheddar, Gouda and Edam were relatively static through October, with some shifts in price at the very start of the month. Emmental dropped between the end of September and start of October, leading to an overall decrease despite prices rising steadily through October. Cheese production in Europe is said to be utilising most of the spare milk, although seasonal declines mean production is below capacity. ■